2018 Goals for Double Debt Single Woman

HAPPY NEW YEAR PEEPS!

Here are my goals for 2018. See my past January goals posts here:

2013 Goals  | 2014 Goals  |  2015 Goals  |  2016 Goals |  2017 Goals

DOUBLE DEBT SINGLE WOMAN GOALS FOR 2018

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ONE. 
 Pay down my student loan debt from $60,300 to $39,900 or less.

I want to end 2018 in the 30’s!  This should be achievable in theory, given that my minimum payments (including interest) should get me to the lower 40’s by December.  However, my extra payments this year will be substantially smaller than they were last year, so this meeting goal will take effort.  Read More

2015 Financial Goals for Double Debt Single Woman + FS-DAIR

Happy New Year!

2015 techno

It is that time of year again. I unveil my 2015 financial goals. Before I do, I’ll look back at my recent yearly goals.

2014 Goals:

  • Pay off  remaining $22,770 balance in credit card debt
  • Open and contribute to 401k up to point of employer match when eligible

2014 Outcome: [partial success]

  • Paid off $16,780 in credit card debt  [remaining balance: -$5,990]
  • Paid $8,720 in student loan interest [0.o -Yeah, this is insane.]
  • Opened and contributed to retirement funds [+$6,578 (including employer match)]

In the footer and sidebar, I have added a tracker for my retirement and other savings to help me have a fuller picture of my finances.

financial picture

2015 Goals:

  • Pay off remaining credit card debt of $5,990
  • Reach $20,000 in retirement savings
  • Reduce student loan debt to $108,000
  • Save $6,000 in savings  (Yes, my lack of an emergency fund is scary.)
  • Pay cash for an international trip – $??

My student loan goal doesn’t look like much of a drop, but you have to remember that the first $750 that I pay each month is just going to interest, not principal. So it will take nearly $15k in payments to get from $113k to $108k.

Undoubtedly, I have some more thinking to do to figure out how to prioritize all of these goals. Save for retirement or pay down debt?

Will a noble samurai rescue me from my quandry? Enter FS-DAIR

Financial Samurai has posted a formula for determining how to prioritize debt repayment vs. retirement funding. His FS-DAIR (Financial Samurai Debt and Investment Ratio), looks like the tool I’ve been hoping to find for a while now. How does it work? This chart lays it all out in a clear format.

FS-DAIR
Source and Image Credit: FinancialSamurai.com

Basically, any debt that you have carrying 10% or higher in interest, should be paid off post-haste, at the expense of any investing (beyond the 401k employer match). Once your debts have interest rates at 9% and below, things get interesting.  Read Sam’s FS-DAIR post for examples of how this works. For instance, Sam uses the following as an example for someone deciding how much to put toward student loans vs 401k.

fs-dair example
Source: FinancialSamurai.com

My student loan debt is made up of many separate loans with different fixed interest rates. I will need to run the numbers to see how this would shape my plan of attack. I’ll do a follow-up post on this in the not too distant future. Thanks, Sam for lending me a sword to use in my battle!

Net Worth – Double Debt Single Woman – January 2015

As my debt drops in 2015, I’ll be tracking my Net Worth.  My first goal will be to see it drop down into the 5-digit zone. Soon you will also be able to track it here @Rockstar Finance. I will be pretty low on the ranked list, but I will be gunning for higher and higher slots. Watch out Finance Phoenix and Feisty Finance!

Networth Jan 5 2015

“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

2014 – A New Year with an Old Goal

happy-new-years-2014

It is hard to believe that it is already 2014.

I started this blog a little over 1 year ago to chronicle my climb out of debt. My goal for 2013 started off nobly enough.  I was fed up with debt. I was going to pay off $30,000 of credit card debt as Phase 1 of a larger debt reduction plan.  Did I accomplish this goal? No. Not even close.

Total paid down:  $7,000+.  That’s it??!!

I still have $22,599.00 of credit card debt remaining. How is this possible?  

2013 Recap:

I set up a budget, sold a bunch of stuff,  moved to lower my rent from $1265 to $425, and got a second job. Moving and giving up my stuff and my privacy, was a bittersweet experience, but I was ready to start eliminating some major debt. Life, however, had a curveball for me.  Things had been going downhill at work at that time and after a particularly stressful rough patch I lost my full-time job immediately upon preparing to start this journey. (To be honest, I’m still a little bitter about how it all went down, but I’m trying to move on.)  I collected unemployment for three months until I found a new job that required a move to a new state. This process, including the expense of moving and having to quickly find a new place to live, put me further behind in my debt repayment goals.

I’ve been thinking about the silver lining of my debt cloud. I was lucky to land a job that paid more than my old job, but I now live in a much higher cost of living area.  I set up a new budget, but sticking to it has been a challenge, as it was likely too tight.

Last week I quit my second job.  I deliberated about it for quite a while, but the number of hours that were expected of us for the same pay, made the effort not worth it.

paperwork

The second employer advertised that employees would only have to work 8-10 per week, but after starting, they made more and more requirements that we had to meet in order to “meet expectations” for continued employment. It was more like 15-20 hours/week worth of work that they wanted for the same flat payment.  I was already putting in 50-55 hours per week at my full-time job. Working 65+ hours per week started to wear me down. I’ve started developing a few chronic health issues. I’ve also been sick multiple times and stress has been a part of it.  I had to let the second job go.  It was not worth losing my health over.  I will still seek additional income, but only after a break.

What will I do in 2014?

I will focus on lowering my living expenses. When my lease is up will move to save as much on rent as I can without sacrificing safety. I will start a few months early so I don’t have to overpay on rent out of desperation like I did when I moved here not long ago. Not sure if I should throw everything at the credit card debt or start a 401k. I’m leaning toward the latter. I’m almost 40 and have NO retirement savings of any kind, which scares me. That is part of what burns me up about debt. Now I understand the meaning of opportunity cost. I think about all the money that I am going to spend paying off debt. If I put that same money into different investment vehicles, I could retire early and have a MUCH better life right now.

Never-Regret2

But I can’t dwell on that.  You live and you learn. I’m going to have a different standard of living than I envisioned for myself, probably for the rest of my life. Extreme frugality is not for everyone, but it is for me. It is my only hope. I have to take my own advice and start paring down even more.

I want to pay off the credit card this year. Next year I focus on maxing out retirement funding and pouring everything else into my six figure student loan debt.

Here is to an electric 2014!

Colourful 2014 in fiery sparklers

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

‘Snowflake Stepdown’ Technique for Debt Payoff

stairs-down

It’s all about motivation.

One technique that I use to stay motivated is what I call the ‘snowflake stepdown’.  I just used it yesterday and now my credit card balance is $26,998.

After I paid my most recent payment to Citibank, my balance was $27, 218. Good. It is down from it’s highest balance of $30,340.

But as I look at that balance, I think how nice it would be to put down another $220 to see that 27 go down, or rather ‘stepdown’, to 26. So I checked my checking account, and saw that I could spare $220 and make do with what was left until my next payday.

Just like that, I immediately made the snowflake payment to Citibank. Now I get to see a $26,000 something balance.  There is only a $220 difference from what was there before, but it feels like $1,000 difference.

It gives me a psychological boost. It feels like things are really starting to move. I can’t wait until my next payday so that I can throw some more money at it. The shackles are starting to loosen a little. Just a little.

Here’s to the Snowflake Stepdown Technique and positive motivation to pay off debt. Cheers.

down-down-down-the-stairs

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)